Beyond Water Stress: Structural Adjustment and Macroeconomic Consequences of the Emerging Water Scarcity

22 Pages Posted: 11 Jul 2017

See all articles by Roberto Roson

Roberto Roson

Ca Foscari University of Venice - Dipartimento di Economia; Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy; Loyola Andalucia University

Date Written: July 2, 2017

Abstract

This work analyzes some system-wide macroeconomic consequences of lower (sustainable) water availability, when global economic growth is postulated according to the Shared Socio-Economic Pathway 1 (SSP1), for the reference year 2050. After finding that the rather optimistic forecasts of economic development cannot be met in most water scarce macro-regions, we assess what consequences for the structure of the economy, welfare and the terms of trade, the insufficiency of water resources would imply. The analysis is undertaken by means of numerical simulations with a global computable general equilibrium model, under a set of alternative hypotheses. In particular, we consider whether (or not) the regional economic systems have a differentiated capability of adaptation (by means of innovation and modification of economic processes), and whether (or not) the scarce water resources can be allocated among industries, such that more water is assigned where its economic value is greater.

Keywords: Water, Economic Growth, Shared Socio-Economic Pathways, Computable General Equilibrium, Virtual Water Trade

JEL Classification: C68, F18, F43, O11, Q01, Q25, Q32, Q56

Suggested Citation

Roson, Roberto, Beyond Water Stress: Structural Adjustment and Macroeconomic Consequences of the Emerging Water Scarcity (July 2, 2017). University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 07/WP/2017, Available at SSRN: https://ssrn.com/abstract=2998168 or http://dx.doi.org/10.2139/ssrn.2998168

Roberto Roson (Contact Author)

Ca Foscari University of Venice - Dipartimento di Economia ( email )

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Venice, 30121
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+39 041 2349176 (Fax)

HOME PAGE: http://venus.unive.it/roson

Bocconi University - IEFE Centre for Research on Energy and Environmental Economics and Policy ( email )

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Milan, 20122
Italy

Loyola Andalucia University ( email )

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Cordoba, CORDOBA 14004
Spain

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